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MONTREAL, March 30,
2023 /CNW/ - LXRandCo, Inc. ("LXR" or
the "Company") (TSX: LXR) (TSX: LXR.WT), a digital-first
omni-channel retailer of authenticated pre-owned luxury handbags
and accessories, is pleased to announce the closing of the brokered
private placement of unsecured convertible debenture units of the
Company (the "Debenture Units") previously announced on
March 1, 2023 (the "Private
Placement") led by Stifel Nicolaus Canada Inc. ("Stifel
GMP"), acting as lead agent, together with a syndicate of
agents (the "Agents"), pursuant to which the Company issued
1,235 debenture units (each, a "Debenture Unit") for gross
proceeds of $1,235,000.
Each Debenture Unit is comprised of (i) one $1,000 principal amount unsecured convertible
debenture (a "Convertible Debenture") and (ii) 700 Class B
share ("Class B Share") purchase warrants of the Company
(each, a "Warrant"). The Convertible Debentures bear
interest at a rate of 10.0% per annum from the closing date of the
offering (the "Closing Date"), and shall mature on
March 30, 2026, the date that is 36
months from the Closing Date (the "Maturity Date").
The outstanding principal amount of each Convertible Debenture
is convertible at the option of the holder thereof into Class B
Shares, at a conversion price of $0.12 per Class B Share (the "Conversion
Price"), at any time prior to close of business on the last
business day immediately preceding the Maturity Date. If, at any
time at any time following the date that is eighteen (18) months
from the Closing Date, the daily volume weighted average trading
price of the Class B Shares on the Toronto Stock Exchange
("TSX") is greater than $0.16
per Class B Share for the preceding 10 consecutive trading days,
the Company has the option to convert all of the principal amount
of the then outstanding Convertible Debentures at the Conversion
Price with at least 30 days' prior written notice.
Each whole Warrant is exercisable to acquire one Class B Share
at an exercise price of $0.16 per
Class B Share (the "Exercise Price") for a period of 24
months from the Closing Date. If, at any time following the date
that is four months from the Closing Date and prior to the expiry
date of the Warrants, the daily volume weighted average trading
price of the Class B Shares on the TSX is greater than $0.20 per Class B Share for the preceding 10
consecutive trading days, the Company shall have the option to
accelerate the expiry date of the Warrants with at least 30 days'
prior written notice.
In consideration for their services, the Company has paid the
Agents a cash commission of 7.0% of the gross proceeds realized by
the Company in respect of the sale of the Debenture Units,
excluding the gross proceeds received from the sale of the
Debenture Units to purchasers under a president's list (the
"President's List"). The cash commission paid to the Agents
on the gross proceeds from purchasers under the President's List
was 3.5%. In addition to the cash commission, the Company also
issued to the Agents 487,083 Class B Share purchase warrants
of the Company (the "Agent Warrants") which will expire 24
months from the Closing Date, to purchase an additional 487,083
Class B Shares at the Conversion Price. The number of Agents
Warrants is equal to the sum of 7.0% of the gross proceeds of the
Private Placement from purchasers not under the Purchaser's List
and 3.5% of the gross proceeds of the Private Placement from
purchaser's under the Purchaser's List, divided by the Conversion
Price.
The net proceeds of the Private Placement will be used for
working capital and for general corporate purposes.
The securities issued in connection with the Private Placement
will be subject to a statutory hold period of four months plus a
day from the date of issuance in accordance with applicable
securities legislation. The Debentures and the Warrants will not be
listed on any exchange.
Exemptions under MI
61-101
Further to the Company's press release on March 1, 2023, and March
28, 2023, Gibraltar &
Company, Inc. Eric Graveline, a
director of the Company and Groupe Colsa Inc. (a company controlled
by Javier San Juan, a director of
the Company) are related parties of the Company (the "Insider
Participants") which have purchased Debentures Units in the
Private Placement and, as such, the Private Placement constitutes a
related party transaction under Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Investments
("MI 61-101"). The Company is relying on the exemption from
the formal valuation requirement in Section 5.5(a) of MI 61-101 and
the exemption from the minority approval requirement in Section
5.7(1)(a) of MI 61-101 based on the board of directors of the
Company having determined, that the fair market value of the
securities subscribed for by "interested parties" (as defined under
MI 61-101), or the consideration paid for such securities, does not
exceed 25% of the Company's market capitalization before giving
effect to the Private Placement. The Company anticipates it will
file a material change report less than 21 days before the closing
of the Private Placement. This shorter period is reasonable and
necessary in the circumstances as the Company wanted to complete
the Private Placement as expeditiously as possible and definitive
information with respect to insider participation has only become
recently available. Information regarding the effect of the Private
Placement on the shareholdings of the Insider Participants is
provided below.
Immediately prior to closing of the Private Placement,
Gibraltar & Company, Inc.
beneficially owned, controlled or directed, directly or indirectly,
17,929,156 Class B Shares, representing approximately 19.6% of the
aggregate issued and outstanding Class B Shares on a non-diluted
basis. In addition, immediately prior to closing of the Private
Placement, Camillo di Prata, a director and the chief
executive officer of the Company and an insider of Gibraltar, beneficially owned, controlled or
directed, directly or indirectly, approximately 7,053,143 Shares,
representing approximately 7.7% of the aggregate issued and
outstanding Class B Shares on a non-diluted basis and Valerie Sorbie, a director and the chair of the
Company and an insider of Gibraltar, beneficially owned, controlled or
directed, directly or indirectly, approximately 2,613,143 Class B
Shares or approximately 2.9% of the aggregate issued and
outstanding Class B Shares on a non-diluted basis. Gibraltar & Company, Inc. acquired 300
Debenture Units under the Private Placement, representing
approximately 24.3% of the 1,235 Debenture Units issued pursuant to
the Private Placement. Ms. Sorbie and Mr. di Prata did not purchase
any Debenture Units personally. Upon closing of the Private
Placement, Gibraltar &
Company, Inc. beneficially owns, controls or directs, directly or
indirectly, approximately $300,000
principal amount of Debentures and 210,000 Warrants, representing
approximately 20.1% of the aggregate issued and outstanding Class B
Shares on a partially diluted basis (assuming full conversion of
the Debentures and full exercise of the Warrants issued under the
Private Placement into Class B Shares).
Immediately prior to closing of the Private Placement, Groupe
Colsa Inc. (a company controlled by Javier
San Juan) beneficially owned, controlled or directed,
directly or indirectly, 1,200,000 Class B Shares, representing
approximately 1.3% of the aggregate issued and outstanding Class B
Shares on a non-diluted basis. Groupe Colsa Inc. acquired 50
Debenture Units under the Private Placement, representing
approximately 4.1% of the 1,235 Debenture Units issued pursuant to
the Private Placement. Upon closing of the Private Placement, Mr.
San Juan beneficially owns, controls or directs, directly or
indirectly, approximately $50,000
principal amount of Debentures and 35,000 Warrants, representing
approximately 1.6% of the aggregate issued and outstanding Class B
Shares on a partially-diluted basis (assuming full conversion of
the Debentures and full exercise of the Warrants issued under the
Private Placement into Class B Shares).
Immediately prior to closing of the Private Placement,
Eric Graveline beneficially owned,
controlled or directed, directly or indirectly, 6,707,643 Class B
Shares, representing approximately 7.34 % of the aggregate issued
and outstanding Class B Shares on a non-diluted basis. Mr.
Graveline acquired 150 Debenture Units under the Private Placement,
representing approximately 12.2% of the 1,235 Debenture Units
issued pursuant to the Private Placement. Upon closing of the
Private Placement, Mr. Graveline is expected to beneficially own,
control or direct, directly or indirectly, approximately
$150,000 principal amount of
Debentures and 105,000 Warrants, representing approximately 7.9% of
the aggregate issued and outstanding Class B Shares on a
partially-diluted basis (assuming full conversion of the Debentures
and full exercise of the Warrants issued under the Private
Placement into Shares).
The Private Placement was considered and unanimously approved by
the board of directors of the Company. There was no contrary view
or abstention by any director approving the Private Placement. The
Insider Participants were not present in the final deliberations
and did not participate in the approval process.
About LXR
LXRandCo is a socially responsible, digital-first omni-channel
retailer of authenticated pre-owned luxury handbags and personal
accessories. Since 2010, we have been providing consumers with
authenticated branded luxury products by promoting their reuse and
providing an environmentally responsible way for consumers to
purchase luxury products. We achieve this through our digital-first
strategy by selling directly to consumers through our website at
www.lxrco.com and indirectly, by powering the e-commerce and other
platforms of key channel partners. Our omni-channel model is also
supported by retail 'shop-in-shop' experience centers and by
wholesale activities with select retail partners across
North America.
Caution Regarding Forward-Looking
Statements
Certain statements in this press release are prospective in
nature and constitute forward-looking information and/or
forward-looking statements within the meaning of applicable
securities laws (collectively, "forward-looking
statements"). Forward-looking statements generally, but not
always, can be identified by the use of forward-looking terminology
such as "outlook", "objective", "may", "could", "would", "will",
"expect", "intend", "estimate", "forecasts", "project", "seek",
"anticipate", "believes", "should", "plans" or "continue", or
similar expressions suggesting future outcomes or events and the
negative of any of these terms. Forward-looking statements in this
news release include, but are not limited to, statements regarding
the Company's intended use of proceeds from the Private Placement.
Forward-looking statements reflect management's current beliefs,
expectations and assumptions and are based on information currently
available to management, which includes assumptions about
management's historical experience, perception of trends and
current business conditions, expected future developments and other
factors which management considers appropriate. With respect to the
forward-looking statements included in this press release,
management has made certain assumptions with respect to, among
other things, the Company's ability to meet its future objectives
and strategies, the Company's ability to achieve its future
projects and plans and that such projects and plans will proceed as
anticipated. As well as assumptions concerning general economic and
market growth rates, currency exchange and interest rates and
competitive intensity.
Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
future circumstances, outcomes or results anticipated or implied by
such forward-looking statements will occur or that plans,
intentions or expectations upon which the forward-looking
statements are based will occur.
All forward-looking statements included in and incorporated into
this press release are qualified by these cautionary statements.
Unless otherwise indicated, the forward-looking statements
contained herein are made as of the date of this press release, and
except as required by applicable law, the Company does not
undertake any obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Readers are cautioned that the actual results achieved may vary
from the information provided herein and that such variations may
be material. Consequently, there are no representations by the
Company that actual results achieved will be the same in whole or
in part as those set out in the forward-looking statements.
SOURCE LXRandCo, Inc.